UAD4612- ALTERNATIVE DISPUTE RESOLUTION

(ADR) METHODS AND PROCEDURES

Lecture 4: Mediation Principles and Practice

Date: 14th June 2022 (Tuesday)
20th June 2022 (Monday)

Prepared by Mr. HS Wong

© . No part of these lecture notes shall be reproduced or distributed in any manner whatsoever.
• MEDIATION has long been embraced in Malaysia as a form
of alternative dispute resolution (ADR). Several professional
institutions such as the Malaysian Mediation Centre and the
Chartered Institute of Arbitrators provide mediation services
using their respective codes of ethics and rules.

• The Mediation Act2012 (Act) was recently introduced by

Parliament, and came into force on Aug 1, 2012 with the
aim of promoting and encouraging mediation as a method
of ADR and to facilitate the settlement of disputes in a fair,
speedy and cost-effective manner.
• "Mediation" is defined under the Act to mean a
voluntary process in which a mediator facilitates
communication and negotiation between parties
to assist them in reaching an agreement.

• The Act does not apply to: (1) mediation

conducted by courts; (2) mediation conducted
by the Legal Aid Department; and (3) matters
expressly excluded in its schedule (such as
proceedings on the Federal Constitution, the
remedy of temporary or permanent
injunctions, and any criminal matter).
• The Act does not oblige parties to mediate before
litigation or arbitration.

• Also, parties may choose to mediate

simultaneously with any civil court action or
arbitration.

• Where proceedings have already commenced,

mediation does not act as a stay or extension of
proceedings.
• Steps to Commence Mediation

• First, a person may initiate mediation by sending to the other party a written
invitation to mediate, specifying the matters in dispute.

• The Act sets out how an invitation will be deemed accepted or rejected by
the other party.

• Upon commencement of mediation, parties must enter into a written

mediation agreement, which: (1) contains an agreement to mediate; and (2)
deals with matters such as the appointment of a mediator and costs.
• Mediation Process
• (1) Pre-mediation (4) Private Discussions

• (2) Mediator’s Opening (5) 2nd Joint Discussion

• (3) 1st Joint Discussion (6) Agreement

✓ Opening Statements
✓ Summarising
✓ Agenda Setting
✓ Clarification & Exploration
• Mediation Process
• (1) Preparatory Stage
➢ The Agenda

• (2) Stages in Mediation

• 2.1 Introductory Phase
• 2.1.1 Mediator’s Opening Statement
• 2.1.2 Establish Guidelines
• 2.1.3 Confirmation
• 2.1.4 Commitment
• Mediation Process
• (2) Stages in Mediation
• 2.2 Understanding Phase
• 2.2.1 Parties’ Opening Statement
• 2.2.2 Summary
• 2.2.3 Discussion-Joint discussion
✓ Focus on interest rather than position
✓ Separate the people from their problem
✓ Adopt a problem-solving approach- being
open and sharing information
✓ Not allowing emotions, personalities, and
differences to side track the issues
• Mediation Process
• 2.2.3 Discussion-Private discussion
✓ Sensitives issues
✓ Real or perceived weaknesses which
parties do not wish to acknowledge in a
joint session
✓ Revealing certain matters for fear that the
other party might take advantage of
✓ Facts which could be detrimental to the
party
*Option Generation
*Reality Testing and Checking Alternatives
• Mediation Process
• Option Generation & Reality Testing and Checking Alternatives

BATNA WATNA

MLANTNA
• Mediation Process
• 2.3 Negotiation Phase
✓ Joint & Separate Sessions

• 2.4 Settlement Phase

• If an agreement is not reached, the Mediator:

✓ Can adjourn the matter to another date if parties
still wish to mediate;
✓ Should appreciate parties for the effort taken;
✓ Should allow parties to seek another form of dispute
resolution process or proceed to trial.
• The Mediator

• Only a person who: (1) possesses the relevant qualifications, knowledge or

experience in mediation through training or formal tertiary education; or (2)
satisfies the requirements of an organisation which provides mediation
services, can be appointed as a mediator under the Act.
• A mediator is required to disclose, before accepting the appointment, any
known facts that a reasonable person would consider likely to affect his
impartiality as mediator in the outcome of the mediation.
• A mediator must act independently and impartially, with a view to assisting
the parties to reach a satisfactory resolution of the dispute and suggest
options for the settlement of the dispute.
• A mediator will not be liable for any act or omission in the discharge of his
functions as a mediator unless the act or omission is proved to have been
fraudulent or involves wilful misconduct.
• Confidentiality

• A mediation is conducted privately.

• In the same vein, the Act also prohibits the disclosure of any oral or written
statement made during or in relation to a mediation, subject to some
exceptions.

• This essentially provides a significant boost for mediation in addressing the

issue of confidentiality; one of the primary concerns of litigants in a
mediation process.
• Settlement Agreement

• Upon the conclusion of a mediation and the reaching of an agreement, the

parties must enter into a binding settlement agreement.

• If proceedings have been commenced in court, the settlement agreement

may be recorded before the court as a consent judgment or judgment of the
court.
• Mediator’s Skills & Strategies

(3) Summarising
(4) Reframing
(1) Listening skills
(5) General Gestures
(Physical expressions)
(6) Rapport
(7) Communication Barries

(2) Paraphrasing
• Mediator’s Skills & Strategies
• AIAC Mediation Rules 2018*
• Rule 1 Application of the AIAC Mediation Rules
• Rule 2 Commencement of the Mediation
• Where There is A Prior Agreement to
• Refer to the AIAC Mediation Rules
• Rule 3 Commencement of Mediation
• Where There is No Prior Agreement to
• Refer to the AIAC Mediation Rules
• Rule 4 Place and Language(s) of the Mediation
• Rule 5 Appointment and Confirmation of the Mediator
• Rule 6 Independence and Impartiality of the Mediator
• Rule 7 Replacement, Disqualification and Resignation of the
Mediator
* Any reference to the Kuala Lumpur Regional Centre for Arbitration (KLRCA) in any written law or in any instrument, deed, title, document, bond, agreement or
working arrangement shall, after 28th February 2018, be construed as a reference to the AIAC.
• AIAC Mediation Rules 2018
• Rule 8 Role of the Mediator
• Rule 9 Role of the Parties
• Rule 10 Conduct of the Mediation
• Rule 11 Preliminary Conference
• Rule 12 Authority and Representation
• Rule 13 Privacy and Confidentiality
• Rule 14 Termination of the Mediation
• Rule 15 Costs and Fees
• Rule 16 Administrative Assistance
• Rule 17 Exclusion of Liability
• Rule 18 Schedule of Fees
• AIAC Mediation Rules 2018
• The AIAC Mediation Rules are a set of procedural rules covering all
aspects of the Mediation process to help parties resolve their domestic or
international disputes.

• With the all new Mediation Rules, AIAC aim to promote mediation as a
viable commercial option for parties in Malaysia and abroad as interest-
based mediated negotiations can result in settlements that are more
satisfactory to all parties than simple compromise decisions.

• The streamlined new rules ensures that the mediation process addresses
all parties' interests which in turn will preserve the working relationship of
parties and ensure those who negotiate their own settlements have more
control over the outcome of their dispute.
• Application of AIAC Mediation Rules 2018
• These Rules apply to any mediation of any present or future dispute:-

• (a) where the Parties have agreed that the AIAC Mediation Rules will apply
whether before or after a difference or dispute arises.
• (b) the Parties have authorised the mediator or another person or
institution to design a mediation process and that mediator, person or
institution adopts the AIAC Mediation Rules in whole or in part.

• Where any of the Rules is in conflict with the provision of law from which
the Parties cannot derogate, that provision of law prevails.
• Rule 2
• Commencement of the Mediation Where There is A Prior Agreement to
Refer to the AIAC Mediation Rules.

• Rule 3
• Commencement of the Mediation Where There is No Prior Agreement to
Refer to the AIAC Mediation Rules.
• Appointment and Confirmation of Mediator
• Rule 5(1): Where all Parties have agreed upon a proposed mediator, who
is willing to serve and is not disqualified under Rule 6, the Parties will
jointly nominate that person as the mediator for the Director’s
confirmation.
• Rule 5(2): If, within 30 days of the Request for Mediation under Rule 2 or
Rule 3, all Parties have not agreed upon a proposed mediator willing to
serve and not disqualified under Rule 6, then the Director shall, after
consulting the Parties, either appoint a mediator or propose a list of
mediators to the Parties. All of the Parties may jointly nominate a mediator
from the said list for confirmation by the Director, failing which the Director
shall appoint a mediator.
• Rule 5(3): When appointing a mediator, the Director shall consider the
Parties’ agreement as to the attributes of a mediator or in absence of such
agreement, any other attributes as the Director deems appropriate.
• Appointment and Confirmation of Mediator
• Rule 5(4): If any Party objects to the mediator appointed by the Director
and notifies the Director and all other Parties in writing, stating the reasons
for such objection, within 15 days of receipt of notification of the
appointment, the Director shall appoint another mediator.
• Rule 5(5): There shall be one mediator unless the Parties have agreed
otherwise. Upon agreement of the Parties, the Parties may nominate more
than one mediator or request the Director to appoint more than one
mediator, in accordance with the provisions of the AIAC Mediation Rules.
The Director may propose to the Parties that there be more than one
mediator, considering the circumstances of the case.
• Roles of Mediator
• The Mediator shall assist the parties in an independent and impartial
manner to reach an amicable settlement of the dispute.

• The Mediator may conduct the Mediation in such manner as the Mediator
considers appropriate, having regard to the circumstances of the dispute,
the wishes of the parties and any practical considerations which might be
relevant for the satisfactory and prompt resolution of the dispute.

• Prior to or during the Mediation, the Mediator may communicate with the
parties together, or with any party separately, with or without its
representatives, either in person, by telephone, videoconference or
electronically as the Mediator sees fit.
• Roles of Mediator
• The parties may be required by the Mediator to participate in a preliminary
conference prior to the commencement of the formal Mediation. The
purpose of the preliminary conference is to enable the parties, with the
assistance of the Mediator, to:-
• Discuss and agree upon issues in dispute or formulate a process by which
those issues are to be clarified and agreed;
• Make provision for, in accordance with the Mediator’s directions, the service
and exchange of documentary material relevant to the Mediation including
position papers by all parties;
• Make provision for such other planning and administrative arrangements as
are necessary and appropriate to enable the Mediation to proceed.
• Roles of Mediator
IMPARTIAL
• Should withdraw if
Mediator cannot
CONFLICT OF INTEREST remain impartial
• Should disclose all
possibilities of actual or
potential conflict, if any.
• Should withdraw unless
parties still intend to retain the
Mediator

CONFIDENTIALITY
• Maintain confidentiality and ensure
parties feel assured.
• Non-disclosure matter (unless required
by law or public policy) OR (with consent
of the party concerned).
• Role of the Parties
• Each party to the Mediation has a duty to participate in good faith in the
Mediation. Each party and their representatives will use their best
endeavours to co-operate with each other and with the Mediator to settle
their differences.

• Authority and Representation

• Each party to a Mediation may be assisted or represented by any person it
chooses (including legal advisers). The identity, contact details and roles of
any such persons must be disclosed to all parties and to the Mediator.
• Each party to the Mediation must have authority to settle a dispute or be
represented by a person or persons having full authority to settle the
dispute. In the event that any such authority is limited, the limits of authority
must be disclosed to the parties and the Mediator.
• Confidentiality
• All mediation proceedings shall be private and confidential. All parties and
participants in the Mediation shall execute a written undertaking in the form
of the Confidentiality Undertaking as provided for in Schedule A to give
effect to this requirement.

• Any information given to the Mediator by a party in caucus or private

session shall be kept confidential as between the party furnishing the
information and the Mediator unless the party providing the information
consents to its disclosure to any other party to the Mediation.
• Confidentiality
• The Mediator, all parties and participants in the Mediation must keep all
matters relating to or arising out of the Mediation private and confidential
except:-

• Where disclosure is compelled by law;

• If necessary to give effect to a Mediation agreement or to enforce an
agreement reached to settle or resolve the whole or any part of the dispute;
• With the consent of the parties to the Mediation.
• Principles of Mediation

Voluntary &
flexible

Non-
Informal
adversarial

Parties’
Confidential
autonomy
• Advantages of Mediation
• (1) Parties have full say over the final result
(5) Informal and non-confrontational
and are in the position to decide on the
outcome.
(6) Confidential and non-prejudicial to
the parties in the event the matter cannot
• (2) Parties wok together and not against
be settled and parties take the dispute to
each other.
arbitration or litigation.
• (3) Parties can maintain, restore or rebuild
their relationship.

• (4) Parties enjoy substantial savings in terms

of money and time.
• Preliminary Conference
• The Parties may be required by the mediator and/or co-mediator to participate in a
preliminary conference. The purpose of the preliminary conference is to enable the Parties,
with the assistance of the mediator and/or co-mediator, to:-
• (a) discuss and agree upon issues in dispute or formulate a process by which those issues
are to be clarified and agreed;
• (b) make provision for the service and exchange of documentary material relevant to the
mediation including position papers by all Parties;
• (c) discuss any legal disclosure obligation;
• (d) agree on whether the Parties wish to agree in writing not to commence or not to
continue or stay any arbitral or judicial proceedings relating to the differences or disputes
that are subject of the mediation during the mediation;
• (e) discuss, whether special arrangements for the approval of a settlement agreement
need to be made; and
• (f) make provision for such other planning and administrative arrangements as are
necessary and appropriate to enable the mediation to proceed.
• Termination of the Mediation
• Rule 14
• 1. The mediator and/or co-mediator may suspend or terminate the mediation or resign as
mediator and/or co-mediator without providing reasons for such resignation when he or she
reasonably believes the circumstances require it, including, but not limited to situations,
when he or she has reasonable grounds to suspect that:
• a) the Parties and/or their representatives are unable to participate meaningfully and
• reasonably in mediation; or
• (b) continuation of the mediation process would cause significant harm to any Party or a
third party.

• 2. When the mediator and/or co-mediator determines that it is necessary to suspend or

terminate the mediation or to resign, the mediator and/or co-mediator must do so without
violating the obligation of confidentiality.

• 3. The mediator and/or co-mediator shall promptly inform the Director of the termination or
resignation.
• Termination of the Mediation
• (4) In addition to termination occurring under Rule 14(1), the mediation
shall be deemed to be terminated upon:-
• (a) the signing by the Parties of a joint written statement of termination or
a written settlement agreement;
• (b) a written declaration of the mediator and/or co-mediator, after
consultation with the Parties, to the effect that further attempts at
mediation are no longer justified;
• (c) expiry of 3 months from the date when the mediator and/or co-mediator
was appointed, unless any of the Parties requests the mediator and/or co-
mediator to continue the mediation; or
• (d) by order of the Director in the event that any monies properly payable
under Rule 18 are not paid as required by the AIAC Mediation Rules.
• Costs & Fees- Rule 15
• 1. Unless otherwise agreed or ordered by a court or arbitral tribunal, each
Party shall bear its own costs of the mediation.
• 2. The costs and expenses of the mediation shall include, but are not
limited to:-
• (a) the fees of the mediator and/or co-mediator;
• (b) the cost of the venue hire, including meeting rooms, breakout rooms,
meals, translation fees, photocopying fees, internet access, telephone and
communication expenses, administrative costs incurred under Rule 15(d),
and any other costs reasonably and properly incurred in respect of the
organisation or conduct of the mediation;
• Costs & Fees- Rule 15
• (c) any fees or costs set out above in respect of expert advice or expert
witnesses who attend or provide such advice with the consent of the
Parties;
• (d) the administrative charges of the AIAC relating to the conduct of the
mediation fixed in accordance with the AIAC Mediation Rules. Without
limiting the foregoing, the costs of the AIAC may include:-
• (i) the Registration Fee; and
• (ii) any administrative costs.

• 3. The Parties are jointly and severally liable for costs and fees set out in
Rule 15(2) above.
• 4. The Parties are required to pay the costs and fees irrespective of the
outcome of the mediation.
• Costs & Fees- Rule 15
• 5. If the mediator and/or co-mediator resigns prior to the termination of the
proceeding, the Parties shall pay the fees and expenses that the mediator
and/or co-mediator incurred prior to termination, unless the mediator and/or
co-mediator decides otherwise.
• Rule 16 Administrative Assistance
• The Director may arrange for translators, administrative assistance, and/or other
facilities in order to facilitate the mediation at the request of the mediator and/or
co-mediator and/or the Parties.

• Rule 17 Exclusion of Liability

• 1. Neither the AIAC nor the mediator and/or co-mediator shall be liable to any
Party or to any other participant in the mediation for any act or omission in relation
to or arising out of the mediation conducted under the AIAC Mediation Rules or in
respect of or arising out of any settlement reached in any mediation conducted
under the AIAC Mediation Rules.
• 2. All statements whether written or oral made in the course of the mediation shall
not be relied upon to institute or maintain any action for defamation, libel, slander
or any related complaint.
• Rule 18 Schedule of Fees
• 1. The Parties are free to agree with the mediator and/or co-mediator on
the mediator’s and/or co-mediator's fees. Unless otherwise agreed by the
Parties and mediator and/or co-mediator, the Schedule of Fees shall apply.
• 2. The Schedule of Fees provides the fee scales for international and
domestic mediation.
• 3. After the mediation has commenced in accordance with Rule 2 or Rule
3, the Director shall fix a provisional advance deposit in an amount
intended to cover the mediator's fees and administrative costs. Any such
provisional advance deposit shall be paid by the Parties in equal shares
and will be considered as a partial payment by the Parties of any deposits
of costs and fees fixed by the Director.
• Rule 18 Schedule of Fees
• 4. Such provisional advance deposit shall be payable within 14 days upon
receiving the request from the AIAC.
• 5. At any time during the course of the mediation the Director may require
additional deposits to be paid by the Parties on account of the costs and
fees. Any such additional sums requested by the Director on account of the
costs and fees shall be payable 15 days after the receipt of the request
from the AIAC.
• 6. If any of the monies are not paid in full by both Parties within 14 days
after the receipt of the request from the AIAC, the Director shall so inform
the Parties in order that one or another of them may make the required
payment.
• Rule 18 Schedule of Fees
• 7. If any such payment is not made, the mediator and/or co-mediator, after
consultation with the Director and the Parties, may order the suspension or
termination of the mediation.
• 8. The AIAC may apply the deposits towards the costs and expenses
incurred by the AIAC and the mediator and/or co-mediator in relation to the
mediation.
• 9. Upon termination of the mediation, the AIAC shall render an account to
the Parties of the deposits received and used and return any unexpended
balance to the Parties.
• https://www.malaysianmediationcentre.org/malaysian-mediation-centre-2/
• Malaysian Mediation Centre (MMC)
• 1. Mediation Rules
• 2. Code of Conduct
• MEDIATION PROCESS:
• The normal Mediation Process would involve the parties and Mediator meeting together, at
scheduled session(s) as determined by the parties.
• Essentially mediation runs like a guided negotiation between the parties, with the mediator
facilitating the communication. Most mediations generally run by the following five-stage
format:
• Stage 1: Establishing the Process:
• The Mediator and the parties agree to a number of guidelines they will follow in the
Mediation. This usually includes only allowing one person to speak at a time, treating all
parties with respect, and confidentially.

• Stage 2: Exploring Positions and Interests:

The parties usually make their initial statements regarding their disagreement and define
what they hope to resolve at the Mediation.

• Stage 3: Developing Solutions:

Each party discusses their interests and possible solutions to resolve their disagreement.
• MEDIATION PROCESS:
• Stage 4: Private Sessions:
Where appropriate, the Mediator may hold private and confidential sessions with each party
to assist in determining further interest and/or discussing possible solutions.

• Stage 5: Finalizing A Resolution:

The parties assisted by the Mediator craft a resolution mutually agreeable to both parties.

• Stage 6: The Written Agreement:

Once agreed between parties, the resolution and its terms are formalized in a written
agreement.

• The Mediator’s role in a mediation is principally to facilitate, guide and assist the parties
towards arriving at a mutually agreeable resolution where joint and separate private
sessions may also be used by the Mediator to help the parties define the issue(s) in dispute
clearly, appreciate each parties respective positions, addresses the concerns of the parties
and move closer towards the resolution. The entire mediation process is conducted in a
safe, private and confidential manner. The Mediator shall at all times remain impartial and
non-judgmental.
• OTHER ISSUES:
• Practice Direction No. 4 of 20160- Practice Direction on Mediation.

• Order 34 of the ROC 2012 covers pre-trial case management directions.

There will now be a greater emphasis on mediation.

• First, the new Order 34 rule 2(1A): If a High Court Judge identifies that an
issue arising in the action or proceedings can be resolved by way of
mediation, the Judge may refer the parties to mediation as prescribed by
practice directions issued from time to time.

• Second, the new Order 34 rule 2(1B): all running down cases shall be
subject to mediation.